Interview: John Buckman, Founder of Magnatune Records

Magnatune is the non-evil record label who gives away 128 kbps mp3s of all their artist’s songs for free. You can then choose (or not) to purchase DRM-free higher quality versions at a price you set and they allow you to share their purchased songs with 3 friends. The label splits revenues 50/50 with their (carefully picked) signed artists, while these artists keep all of the rights to their music with a non-exclusive contract. Today, we are very happy to feature an interview with John Buckman, the founder and owner of Magnatune, to help us understand better their revolutionary business model.1. This is the question that pops up on most people’s minds: do you and your artists make enough money? You are giving away the (good-enough for most people) 128 kbps mp3 afterall.

John Buckman: 1 in 42 people who visit Magnatune buy. That’s among the best visitor-to-customer ratios I’ve ever seen. The 128k has a spoken credit on the mp3, immediately pass the song. You can legally remove the spoken credit (the mp3 is Creative Commons license and allows a derivative use) but why bother when you can buy the album for just $5. Besides, even when we didn’t have the spoken ending, we had a great purchaser ration, because I believe that people are willing to pay for music if they are buying something like like, which means a) good music for them b) no DRM, fair rights c) a company they don’t despise (for a change) and d) supporting the artist

2. Some audiophiles don’t listen to enough free music because they believe that the quality of the tracks is not as well-crafted or produced as on major label’s work is. What do you reply to that?

John Buckman: That’s why we only accept 2% to 3% of what we get submitted, because we want the best stuff, and we only release things that we think compete with major label sound quality, but in my experience the music and musicianship is at least as good, if not better, since we’re willing to give artistic freedom and a don’t committee-manage the release process like majors do.

3. How is Magnatune decides if you are going to sign an artist or not? Is there a procedure?

John Buckman: You send the music in (email to a URL, ftp or CD) and if we like it, we sign you up (and exchange of faxed, signed agreements). What we sign is what blows our mind, what we would ourselves buy if we heard on the radio.

4. What is your policy regarding playing the distributed 128 kbps mp3 versions of your music in coffee shops and bars? Do these public places need a license before they can play your artist’s music for the 128 kbps versions too?

John Buckman: Those would be commercial spaces and thus not under the Creative Commons license we use. They’d either have to pay ASCAP/BMI (evil) or get a very low cost public space license from us.

5. Let’s say that a kid buys one of your albums and shares it with 3 friends at school (as it’s allowed by your terms and conditions). Can that kid also share that album with his immediate family members (e.g. siblings, parents), or the 3-friend rule includes the family members?

John Buckman: Hey, no-one’s counting, if you want to share it with 5 people, fine, great, you introduced more people to Magnatune. The point is not to put the files up on your web site as a torrent for the world to take.

6. Are there any plans to offer statistics on individual songs, or maybe even just sell individual songs instead of full albums?

John Buckman: For now, we just sell albums because $1 songs are hard to sell on a visa card, given the $0.50 fee per charge we have to pay. We personally like albums, so that’s what we sell, and since you can pay as little as $5 or get a compilation, there are ways to get the music if you like it.

7. Do you have any plans to offer to your artists more than just a way to sell music or merchadise? For example, if you recognize that a certain artist is a rare but raw talent, would you try to find him a good producer?

John Buckman: Yes, we’ve done that before, for example pairing producer Victor Stone (who wrote and manages CC Mixter, BTW) up with C. Layne. C. Layne’s first album was brilliant songwriting, but poor audio quality, his 2nd sounds amazing. We also did this with Lisa DeBenedictis, who now has the tech chops to produce herself at a much higher level. She also knows all about CC now and is one of the top remixed artists on CC Mixter, and she participates avidly in it, as well as speaking at Creative Commons panels.

8. Do you think that the major labels will eventually “see the light” and release at least 64kbps mp3s of their artist’s albums for free, or do you think that they are in such legal and contract maggling trouble that such idea would never fly for them?

John Buckman: I doubt they’ll ever release control. If they release free music, it’ll be DRMed. They’ll DRM til they destroy their market share and other labels become the new majors.

9. What is your opinion on RIAA sueing music sharers? Are they justified to do so or over the top?

John Buckman: I love it, there’s no better way to create an audience for Magnatune than to have the majors destroy any good feelings in their audience and to be so thoroughly disgusted with the majors that people will do anything not to give them any money. It’s gotten so bad the major labels can’t even buy a Senator, they’re that despised.

10. Have any of your artists gone on to sign with other labels? Would you discourage that or do you think it is like ‘graduating’ from your label into something more mainstream?

John Buckman: A few have, but mostly we pay so much more than indie labels do (which is typically zero) a musician getting $4000 a year from us is very unlikely to do any better with an exclusive deal, except off an advance from a major indie or major label. And frankly, Magnatune is radical enough that people who want to sign up with it want nothing to do with the traditional evil music business.

11. It’s obvious that your website does a good job at distributing music to people who visit, but what types of services do you offer to help promote artists (outside of your website)?

12. There are sites out there, like this, that feature free download links of independent artists on a daily basis. Do you have any sort of affiliation program that might exchange revenue for mindhare in the blogosphere?

John Buckman: I’m not really into affiliate networks, I find that people who are paid to recommend music don’t really do an honest job. I much prefer bloggers and podcasters, and we have very generous podcasting terms (allowing, for example, commercial but poor podcasters to play our music, in addition to all the noncommercial use)

13. Finally, the 1 million dollar question: why no WMA?

John Buckman: Because no-one wants it. With highest-quality VBR, WAVs and FLAC files, why would you want to have a device limited, proprietary sound format?

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32 Comments

I think this is really revolutionary. I walked through the process and saw that when you buy, it ASKS you what you want to pay. It was so unique it was a little disorienting. Novel and really interesting! I’m going to give it a shot, I just need to find a band to check out.

If even one major band moves to this system, Magnatune will see a sharp rise in traffic. For now, I’d be a notch worried that it’s aimed at a small group – those who are willing to experiment with non-radio indy music.

About Indie music. To me automatically it’s not Indie music if it’s on the Internet since Indie music is such a local limited sound to me.

I have listened to some of the bands and I forgot the name but one Rock band is very good and experimental. Good quality. Bands don’t really get into their sound until the 3rd album as you need a consistant medium for honing it.

I also really think it’s the environment like if this record company can really link these bands to the proper recording producers. And the recording is affordable. I think today there is a great venue for more cost effective prodcution though too. Like $3,000 for a good recording at a local recording studio. Is it higher now? It should be affordable and that way newbie producers can get in too.

I love Magnatune, but I would like to see some more “traditional label” goodness in it. By this I mean:

1. Real press push for their 15-20 best bands/artists. Maybe by sending some 128kbps mp3s to get included with new versions of WinAMP, Songbird, or part of the 5 topmost popular Linux distros.

2. Hire 2-3 experienced producers and put them to work with the 15-20 best bands on Magnatune, to make sure that their new albums are easier “listenable” from wider audiences. For these cases, make the cut 60-40 to Magnatune, to help pay the producers.

3. Make it a bit more clear about Radio licensing (terrestrial, satellite, internet). Currently it’s not clear at all if Magnatune requires licensing to play their music on the radio. Magnatune claims that the normal fees to ASCAP/BMI are enough, but that’s not clear at all from their licensing web page.

4. Hook up with the SongBird folks and create the FIRST CreativeCommons-only music store, as an “open” alternative to iTunes music store!

You’re right and sounds like more Web 3.0ish like a more 3D Web with real world customization. I am thinking the same thing for YouTube. The original content is not that great of quality and the flash is out of sync on the website. They should have a studio with the most popular film’s producers getting studio time and cameras etc. they might be able to have a studio franchise around the world.

In house producers would be nice and I was thinking way back, instead of CC’s Mixter they should also have a Free media(NoDRM Crative Commons) media device similar to ITunes. I think Amarok might have started this. Also it would help if Songbird was on Linux too.

I particularly like the sound of #1. Magnatune definitely needs to get its name out there.

I don’t know how big a deal #3 would be, but if it would help get the word out, go for it. (problem, though: In the US at least, radio stations are paid by the big music labels to play songs from THEIR libraries- New York’s attorney general exposed and prosecuted that in New York state, but who’s to say that’s not going on in some fashion)

This is excellent because even if it’s moderately successful, it will apply pressure on traditional labels to re-examine their current business models. They have long been able to operate with impunity because the only place you could get their product was their retail outlets. Realistically, that changed with the internet yet their approach has not. A business that has resorted to suing its own customers is truly a business in a failing industry. And before anyone says “They’re not suing their customers, they’re suing leechers”, well, anybody who downloads a Britney Spears song has probably already purchased an album and decided it wasn’t worth it so they are in fact customers.

I guess it’s just really nice to see a company that respects its customers and just as refreshing to see artists whose top priority is getting their music heard and not become ‘rock stars’. As a musician myself, it’s nice to know there are distribution options available that don’t require you to relinquish your soul to be heard. Keep up the great work.

This is what the music industry needs. The consumer choosing what sucks and does not suck, and paying accordingly without getting screwed by unfair DRM, and the artist/label still making money because they put out a good product.

Sure, it might not be the mega-millions at first, but if it catches on, it could change the music industry paradigm, and then we might not have to listen to Britney Spears when we turn on the radio! w00t!

I know the old way is a tiotally tierd system with like a few singers at the top.

With the new system I want to able able to hear regular bands just jamming and experimenting. There could be more collaberation as well and less time for musicians to leave and start new bands. Today it seems bands are locked in and it’s hard to do reunions.

You only have to listen to Britney Spears because everybody buys her music. Now if bands from Magnatunes get radio airing then we will see an increase in profit for magnatunes, but I wish them all the luck they can get.

Quite surprising that they accept so little. Of course I can see why they’d want to keep the quality level up, but “good music” is such a subjective thing. I’m sure there are plenty of people who would think the music I listen to is nothing but irritating noise, and I’m sure I’d exclude a lot of quality music that just isn’t to my taste if I was making a selection of artists.

I’ve mentioned Magnatune to a few friends as I love the idea of their service, but the response has been pretty negative due to the small number of artists representing some genres. Quality is important, but there’s something to be said for quantity as well.

Hopefully Magnatune will grow and maybe even attract some relatively well known indie bands. I think that would need to happen before more mainstream music buyers would take an interest.

Their business model not only is not evil – it’s intelligent and well thought.

In the end it’s always consumers who say where the market is going. Companies cannot tell consumers what’s good for them. Not for a long time. So it’s better to listen to what consumers demand and offer them a good deal based on their needs.

Traditional labels have been so stubborn not to understand this and start a war against consumers that I’m not sorry for them when I hear they do worse every year. They have a last chance (maybe) to change and adapt to consumers needs. Else, Magnatune will take over real soon

Companies cannot tell consumers what’s good for them. Not for a long time.

Apparently, they can. Given that Madden 07 hit record sales for the franchise this year tells me that consumers are more than willing to happily take it up the ass year-after-year. (For those not in the know, EA bought an exclusive right to use the NFL license in video games, effectively eliminating the competition.)

Is the entertainment industry evil? I don’t think so. If I could sell you a Ford Pinto for $100,000, and you were dumb enough to pay that much for it, even though you knew the actual value of it, then I’m not evil .. you’re just stupid And you can’t tell me that people don’t know the value of music either. Isn’t that why so many of them steal it, because it costs too much?

It really is the job of the producer to see how much they can squeeze the consumer for. In the current system, it’s actually the consumers’ fault for letting them push it as far as they have. When it comes to DRM, it’s time to start pointing the blame where it really belongs. Instead of blasting the recording industry, why not aim that venom at the next person you see at the record store buying the latest hip-hop album of the month on a copy-protected CD? It ain’t like they’re pointing a gun at your head forcing you to buy the crap.

I suggest everyone give the band The West Exit on Magnatune a spin. Good stuff.

I’ve been buying music from magnatune for a couple years. I even have their business cards that I hand out. You have to respect Magnatune’s business plan, 50% directly to artist and a creative commons license.